Bakkafrost reports \’positive Q2\’ despite EBIT drop

Bakkafrost CEO Regin Jacobsen

The Bakkafrost Group today reported a positive performance from all of its activities during the second quarter of this year despite the financial impact of Covid-19 – with the Scottish Salmon Company, its new acquisition, playing a strong role.

The Faroese salmon farmer delivered a total operating EBIT of 181.9 million Danish kroner (DKK) (£22 million) in Q2 2020, down from DKK 338 million (£41 million) a year ago. The total harvested volume was 20,900 tonnes gutted weight, with 12,900 tonnes from the Faroe Islands and 7,900 tonnes from Scotland. The Scottish farming segment produced an EBIT of DKK 28.8 million.

CEO Regin Jacobsen said:

\’The first half of 2020 has been severely affected by the Covid-19 pandemic. Together with increased transportation costs and currency movements, this has had a negative impact on our financial results. We are, however, pleased to have positive results in all segments: VAP, FOF and the farming segments in the Faroe Islands and Scotland. We are also grateful that we have been able to keep our employees safe during the pandemic and of having been able to maintain the supply of healthy and safe salmon products to our customers.

\’In this quarter we are especially content with the strong results from our VAP segment which has produced higher volumes than ever before in order to serve the increased demand from our retail customers. The flexibility in our integrated value chain has proven its value and demonstrated our ability to adapt quickly to changes in market dynamics.

\’We are also pleased by the benefits that are now beginning to materialise in the operation in Scotland as well as from our large investment programme. The new hatchery at Strond is now in full operation delivering a substantive share of our required smolt volume in the Faroe Islands and with steady increase in average smolt size.

\’The farming segment will greatly benefit from this improvement over the coming quarters. In Scotland, we have taken important steps to implement the strategy with the initiated expansion of the Applecross hatchery. Finally, our new biogas plant has commenced operation and will during the coming months start producing clean energy and contribute to achieving our ambitious carbon reduction target to halve our CO2-emission by 2030.

\’Looking forward, we expect the Covid-19 pandemic to continue for some time, challenging the global market for salmon and making the outlook hard to predict. We believe, however, that the long-term outlook is still good as the fundamentals in the protein market have not changed.\’

Looking ahead Bakkafrost said high focus has been kept to ensure flow in the market and the company planned to balance diversification to reduce market risk. The company also reports:

\’The size of transferred smolt is increasing and will gradually impact the farming output over the next couple of years. The losses of fish to the severe storm, that hit the Faroe Islands in late February, caused a severe damage and took the harvest volume down from expected 57,000 tonnes to 50,000 tonnes in 2020. The operation in Scotland is gradually improving its key performing indicators and is expected to improve further over the coming years as further investments in the operation will add benefits.\’


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